Jamie Dimon’s Diaspora: The lofty perches where ex-JPMorganites land

On Thursday, British bank Standard Chartered hired Bill Winters as its chief executive. You may recognize Winters, who has been in hibernation for the past few years running a small asset management firm. But before that, he was a top executive at JPMorgan Chase. In September 2008, Fortune dubbed Winters, along with then-CFO Heidi Miller among others, Dimon’s Swat Team, in an article about how the bank had managed to avoid the worst of the financial crisis that had begun to unfurl.

Winters was considered a potential successor to Dimon. But in 2009, he was abruptly ousted from the bank by the JPMorgan CEO. A Wall Street Journal article published Thursday reported that Winters had told friends he was shown the door because he never really believed in the universal banking model of combining an investment bank with a traditional lender. Of course, that model has worked out very well for Dimon. And now it looks like Winters, the former investment banker, is embracing the lending business as well. Standard Chartered STAN is a very large commercial bank.

Winters was one of the first members of Dimon’s swat team to leave JPMorgan. Since then, nearly all of those executives have left the bank, many in the wake of JPMorgan’s $6 billion so-called London Whale trading loss. Winters and the others likely felt that they were ready to run their own firms, and Jamie Dimon was not ready to stop running his. Whatever the reason, JPMorgan, under Dimon’s tutelage, has proven to be a viable training ground for future CEOs. These days, a growing number of large financial firms are now run by ex-JPMorganites. Here’s where they have landed:

Is JPMorgan Chase really America’s dog-friendliest bank?

JPMorgan Chase’s CEO Jamie Dimon wants investors and regulators to know that his bank is not about risky whale-sized derivatives trading. What is JPMorgan Chase really about? Serving regular Americans, who love dogs.

On Tuesday, at JPMorgan’s annual investor day, Dimon stressed how dog-friendly the bank’s branches are. “Around the country, people bring in their dogs and sit around for social reasons,” said Dimon. “We give out little doggie bones.”

The bank’s event was packed with six hours of presentations from top executives and included plenty of PowerPoint. There were 78 slides on the company’s consumer banking operation alone. But Dimon’s dog biscuit statement got more responses on social media than just about anything else that was said during the day:

Turns out JPMorgan JPM is indeed pretty dog friendly. In fact, a lot of banks are competing to be America’s friendliest bank to man’s best friend.

Dimon’s “doggie bone” statement, though, is only mostly accurate. Not every branch is giving out treats. There are two Chase bank branches within a quarter mile of my midtown Manhattan office. Both say customers are welcome to bring in their dogs to make deposits, get money orders, or socialize. But neither one has doggie treats. That could be because there aren’t a lot of people looking to socialize with their dogs in midtown Manhattan. The people I talked to at all three branches seemed to know that dog treats were available at other branches. An employee at the Chase branch at 96th and Broadway, on Manhattan’s Upper West Side, told me about the dog treats when I asked if I could bring in my dog. (Full disclosure: I don’t actually own a dog.)

A reporter at Fortune who does have a dog and is a Chase customer says she regularly gets dog treats when she goes in to a branch, but she has to ask for them. (Her dog now wants to go banking all the time.)

Rover.com lists Austin first on its list of America’s most dog-friendly cities. An employee at a Chase bank branch in an office building in downtown Austin says it has dog treats, but that I would need to use the entrance in the back of the building. The guard at the front entrance, which is also used by other tenants, does not allow dogs in the building. One Austin dog owner, though, seems happy with her Chase experience.

I’m not sure if being dog friendly and handing out treats gets banks customers, but a lot of banks seem to think that it will. The trend appears to have been started by Commerce Bank, which, according to Wikipedia at least, gave out lollipops as well, though not for dogs. TD Bank TD, which bought Commerce in 2007, mentions that it has dog biscuits available on the about page on its website. I did not find any similar language on JPMorgan’s website. The Wells Fargo WFC branches I called told me they offer customers dog treats.

The one exception among all these dog-loving big banks is Citigroup C. An employee at the Citibank branch six blocks south of my office told me that, other than for blind customers, dogs are not allowed in its branch. I got the same message from other Citi branches. One asked me how big my dog was, which was hard to answer because I don’t have a dog. A staffer at a Citi branch in San Francisco, which is also listed on Rover.com as a dog-friendly city, told me that dogs are allowed in the bank as long as they are leashed. No treats.

Jamie Dimon has been talking about dogs quite a bit lately. On the bank’s most recent earnings call, Dimon said JPMorgan would do just fine as long as the firm “stops stepping in dog shit, which we do every now and then.” I believe he was speaking metaphorically. Then again, maybe this has something to do with all the dog socializing going on at JPMorgan’s branches?

JPMorgan has another kind of canine connection. The Oscar-winning film Dog Day Afternoon is based on a 1972 bank robbery of a Chase branch in Brooklyn. The movie has nothing to do with actual dogs.

Why JPMorgan Chase wants a ‘Wonderful Life’ bank

On Tuesday, at the bank’s annual investor day, when CEO Jamie Dimon took the mic, one of the first things he told investors to do was check out one of the bank’s branches. “Around the country, people bring in their dogs and sit around for social reasons,” said Dimon. “We give out little doggie bones.”

The buzzword these days in big banking is simplicity. And on Tuesday, JPMorgan Chase executives became the latest top bankers to claim they want to be more George Bailey than, well, J.P. Morgan. The bank said it will cut $2.8 billion in expenses from its investment banking division in the next three years. About $1.5 billion of those cost reductions will come from “business simplification.”

JPMorgan JPM has long had one of the largest financial derivatives operations on Wall Street. The bank invented the securities that were used to bet on—and eventually against—the mortgage market. On Tuesday, Daniel Pinto, the head of JPMorgan’s investment bank, emphasized how the bank was looking to reduce its activity in one of the most complex areas of finance. Pinto said the bank would either exit or dramatically scale back its processing of over the counter derivatives transactions for clients. He said the bank also plans to “rapidly compress” its own derivatives exposure.

JPMorgan said it was reducing its derivatives operations on account of new regulations that would require the bank to set aside more capital. Also, if you want to be known as a simpler bank, derivatives is probably not the place you want to be.

The bank on Tuesday said it was looking to reduce the amount of deposits it holds for other businesses by $100 billion, cut back on the amount of lending it does to hedge funds and even close about 300 of its dog-friendly bank branches. All of this comes as an olive branch of sorts to JPMorgan’s critics, who say the bank is too big. Last month, Goldman Sachs issued a report that said JPMorgan would be worth more if it were split up. On Tuesday, though, Jamie Dimon, JPMorgan’s CEO, said he has no plans to do that. “We’re not going to give up investment banking for anyone, not even Richard Ramsden,” said Dimon, referring to the Goldman analyst who wrote the report.

Wall Streeters typically say they are in the business of helping clients manage sophisticated risks and transactions. Stressing simplicity is an odd sales pitch for a large bank like JPMorgan. But the problem Dimon and other top bankers have is that investment banking—in part because of new regulations and also on account of the fact that the business has change—is not as profitable as it used to be. Just four years ago, the return on equity of JPMorgan’s investment bank was nearly 20%. Now, it is half that.

Investors may accept lower return businesses as long as they are convinced that they are lower risk as well. Shares of Morgan Stanley MS, for instance, have outperformed rivals recently, as CEO James Gorman has emphasized lower risk businesses like asset management.

Dimon seems to be getting the message. On Tuesday, he said JPMorgan was really no different than the average regional bank, just, ya know, bigger. In fact, he said this twice.

For a bank that still has a derivatives book with a notional value of $65 trillion, that statement is a stretch. But even as large as it is, JPMorgan is probably far less risky and complex than its detractors would have you believe.

Nevertheless, the notion that JPMorgan is just too big to work seems to be gaining momentum. So, if Dimon wants JPMorgan to remain in investment banking, and all of the many businesses it is in, he needs to sell simplicity. He’s trying his best.

Dimon’s compensation in 2014 comprised a base salary of $1.5 million, $11.1 million in restricted stock and a $7.4 million cash incentive bonus, the company said in a regulatory filing.

His package in 2013 was composed of a base salary of $1.5 million and $18.5 million in restricted stock units.

JPMorgan is the biggest U.S. bank, with $2.6 trillion in assets. Dimon, 58, is the most outspoken of big bank CEOsand has recently bristled at public criticism that JPMorgan is too big and complex to manage safely and efficiently.

JPMorgan did not explain its rationale for the compensation decisions. The board is expected to provide an explanation in a proxy statement to be filed ahead of the company’s annual meeting in May.

Two year ago, Dimon’s pay was cut in half to $11.5 million for 2012, which was the year JPMorgan traders handling company accounts lost $6.25 billion in the so-called “London Whale” derivatives transactions. Previously, Dimon had received $23 million for each of 2011 and 2010.

Dimon was treated for throat cancer in the latter half of 2014.

JPMorgan JPM said on Thursday that the base salaries also remained unchanged at $750,000 for other operating committee members, except Daniel Pinto, the London-based chief of corporate and investment banking.

Jamie Dimon calls regulation un-American, once again

JPMorgan Chase CEO Jamie Dimon still thinks the way banks are treated these days is un-American.

On a conference call on Wednesday morning in which the bank reported that last year it had earned $22 billion, or roughly 240,000 times what’s in the average American’s retirement account, Jamie Dimon said that JPMorgan JPM was “under assault,” and questioned whether the increased scrutiny by regulators of banks since the financial crisis has gone too far.

“In the old days, you dealt with one regulator. Now it’s five or six,” Dimon said, referring to instances when multiple regulators have sought to punish JPMorgan for the same issue. “You all should ask the question, how American that is.”

It’s not the first time Dimon has questioned the American as apple pie-ness of banking regulation. In 2011, Dimon called an earlier version of capital rules contemplated by international bank regulators in Switzerland un-American. “I’m very close to thinking the United States shouldn’t be in Basel any more. I would not have agreed to rules that are blatantly anti-American,” Dimon told the Financial Times at the time. “Our regulators should go there and say, ‘If it’s not in the interests of the United States, we’re not doing it.’”

Back then, Dimon seemed to be arguing that his bank had come through the financial crisis better than others. So, why should it be penalized?

Dimon’s Wednesday comments came in response to a question about a new proposal from the Federal Reserve that would require JPMorgan, the biggest bank in America, to hold more capital in reserve to protect against losses, even compared to its other mega-bank rivals. The Fed has said the new proposal adjusts capital rules to account for the fact that risks at some banks are more complex than others, and maybe harder to detect. But Dimon effectively said the proposal shows that regulators still don’t get his bank.

“It’s just because we’re big,” said Dimon.

But regulators aren’t the only ones questioning JPMorgan’s size. Last week, rival Goldman Sachs released a report that said JPMorgan should be broken up. When asked by Fortune on Wednesday’s call whether he thought Goldman should be broken up, Dimon laughed and then offered, “No comment.”

Like he has in the past, Dimon defended JPMorgan’s size. He said it makes the bank more diverse and safer, not the opposite. He also noted that many of the aspects of JPMorgan that have raised concern among regulators, like the bank’s $300 billion portfolio of so-called available for sale securities, make it safer, not riskier or more complex. “Our AFS portfolio adds to liquidity,” said Dimon.

The bank’s size also seems to attract the attention of more regulators, something that Dimon thinks is unfair. But it has been a very long time since a big bank like JPMorgan would have had to deal with only one federal regulator, long before Dimon’s career began. According to bank historian John Gordan Steele, the Federal Reserve got its mandate to oversee the nation’s largest banks in 1913 (the same year that the actual J.P. Morgan died), making it the second federal regulator besides the Comptroller of the Currency. Banks also had to answer to state regulators.

Regulation doesn’t seem to be holding JPMorgan back that much. The bank reported a nearly $1 billion charge in the last three months of 2014 for increased legal expenses. But even with that, JPMorgan said that its per-share profit in 2014 was the highest in its history.

Recently, Bloomberg reported that Jamie Dimon was a key player in an industry-wide effort to roll back a provision of the Dodd-Frank financial reform bill that would have required banks to split their derivative trading units from the rest of the bank. JPMorgan would have been among the banks most affected by the rule, which has been dropped.

JP Morgan Chase CEO Jamie Dimon is cancer-free

Earlier this year, Jamie Dimon, JP Morgan Chase’s CEO, announced that he had been diagnosed with throat cancer. Today, he sent a memo to company employees saying that he had been declared cancer-free.

“This week I had the thorough round of tests and scans that are normally done three months following treatment, including a CAT scan and a PET scan,” he said. “The good news is that the results came back completely clear, showing no evidence of cancer in my body.”

Dimon, leader of the nation’s biggest bank, rattled investors in July when he announced his diagnosis and his upcoming treatment. Shares in the company immediately fell as investors worried about the possibility of a change in management or that he would be distracted for the next few months. With the hopeful news today, shares of JP Morgan JPM gained more than 2%.

The London Whale-sized loopholes in Wall Street pay reform

Just weeks after his first inauguration, President Obama delivered a landmark speech on the dangers of over-the-top Wall Street pay. Today, more than five years later, he’s still nagging regulators to do something real about it.

Wall Street pay practices, as Obama put it so well in February 2009, have “contributed to a reckless culture and quarter-by-quarter mentality that in turn have wrought havoc in our financial system.”

The Obama administration did win some modest compensation reforms the next year. The 2010 Dodd-Frank Act includes a ban on banker pay that “encourages inappropriate risks.” But federal regulators still haven’t finalized the enforcement rules that will put the ban into effect. Earlier this month, the President summoned financial regulators to the White House to prod them to get the job done.

The regulators, unfortunately, haven’t just been dragging their feet. The only proposal they’ve advanced so far turns out to be incredibly wimpy. That proposal, released in 2011, ignores key lessons from the last half-dozen years of financial scandals — everything from Bear Stearns and Angelo Mozilo to the London Whale.

You remember the London Whale, don’t you? JPMorgan Chase JPM trader Bruno Iksil’s high-risk recklessness lost his employer $6.2 billion. But the proposed pay restrictions now on the table only apply to banking top brass. That leaves traders like Iksil off the hook.

No one who can put shareholders and taxpayers at risk should get a regulatory free pass. What about the executives the proposed regs do cover? They have little reason to complain either. The only specific pay restriction relates to the timing of bonuses. The idea: if bankers have to wait to see if their bets actually pay off in the long-term, they’ll do less high-risk gambling for short-term gain.

Not a bad idea. But the only requirement federal regulators are considering —that bankers have to wait three years to collect half their annual bonuses — doesn’t amount to much of a disincentive to short-term recklessness.

Former Countrywide CEO Angelo Mozilo would be living no less large today if this mousey reform had been in force during his subprime-mortgage golden years. Mozilo annually raked in huge payouts over eight years — accumulating more than half a billion dollars — before the housing market bubble burst. Requiring Mozilo to spread half those annual bonuses out over three years would have made only a marginal dent on that fortune.

Or consider Mozilo’s counterparts at Bear Stearns. That bank’s top five executives pocketed $1.1 billion in “performance shares” between 2000 and 2008 before their venerable financial institution went down in flames. No three-year wait would have changed their behavior either.

At least the Bear Stearns guys did, in the end, lose their jobs. We can’t say the same for the top execs at the Wall Street giants that taxpayer largesse kept afloat after the 2008 crash. These bailed-out banks just kept doling out new share and stock option grants, perpetuating a system that offers massive rewards for boosting share prices by whatever means necessary — with zero downside risk.

The proposed “inappropriate risks” rule does nothing to restrict such equity-based forms of compensation.

U.S. regulators could learn a few things from their European counterparts. While not loophole-free, the EU’s new banker pay standards are tougher. Europe’s new rules limit bonuses to no more than 100% of base salary, or up to 200% if shareholders approve. And, with some exceptions, these limits would hit everyone who makes more than 500,000 euros per year or whose pay ranks them in the top 0.3% of staff.

Another fresh idea for cracking down on the reckless Wall Street bonus culture has come from New York Federal Reserve Bank President William Dudley. He has just proposed that part of senior banker pay be sequestered in a “performance bond,” subject to forfeiture if the bank is fined for breaking the law.

The International Monetary Fund, meanwhile, is promoting a “financial activities tax” on profits and executive compensation at the largest banks. These higher tax bills could prompt boards to reduce the overall size of the outrageous paychecks that have encouraged outrageous behavior.

None of these three approaches would totally erase the threat of “inappropriate risks.” But they would do much more to protect us from financial recklessness than the paltry first stab at pay reform. It’s time for financial regulators to refocus — and really take aim at the London Whales, Angelo Mozilos, and Bear Stearnses of tomorrow.

Sarah Anderson directs the Global Economy Project at the Institute for Policy Studies in Washington, DC.

Goldman rides tax inversions to top of M&A heap

The investment bank has made more than any other Wall Street firm advising companies on the controversial acquisition deals that have enabled U.S. companies to move their headquarters overseas and avoid U.S. taxes. According to Thomson Reuters, Goldman GS has raked in just over $200 million in fees in 3.5 years advising companies on how to do deals that will allow them to contribute less to the United States.

Goldman is certainly not alone in benefitting from inversions. It is closely followed by JPMorgan Chase JPM, which stands to make $185 million on these deals. The New York Times noted on Tuesday that, collectively, Wall Street firms are nearing in on the $1 billion mark in fees from the deals, and don’t forget all the fees charged by law firms and other advisors who work on these deals.

By jumping with both feet into inversions, Goldman has been able to regain the top spot among M&A advisors this year. According to Wells Fargo, through mid July, Goldman was an advisor on just under 30% of all completed global M&A transactions this year. That helped it secure the No. 1 spot over Morgan Stanley MS. This time last year, Goldman followed Morgan slightly on M&A transactions. But Goldman still led last year by the number of deals announced.

In response to a question from a Fortune reporter on an earnings conference call, JPMorgan CEO Jamie Dimon gave the tax inversion deals a thumbs up. He said as long as the U.S. was going to have a higher tax rate than other countries, American companies should feel free to move elsewhere. He likened the move to consumers who choose to shop at Wal-Mart WMT because it’s ostensibly cheaper than alternative options.

Goldman Sachs CEO Lloyd Blankfein does not seem to have made any similar statements on inversions, either for or against. Two years ago, as the U.S. was nearing the fiscal cliff, Blankfein wrote an editorial for the Wall Street Journal saying the government needed to raise more tax revenue. He said that President Obama had signaled that he was willing to make a deal on corporate tax reform, and Blankfein called for business leaders to work with the president. No deal was ever struck.

Inversions have become an increasingly popular way for U.S. companies to avoid the IRS, and they have come under increasing scrutiny. Fortune’s Allan Sloan recently called corporate executives who do inversions “positively un-American.” What’s more, Sloan argued that inversions undermined the U.S. tax base and that such deals will be bad for all shareholders in the long run.

You know who else is worried about inversions? Economists at Goldman Sachs. The bank recently noted in a report how much money the U.S. could lose in tax dollars because of them. Someone should show that report to the bankers.

Is JPMorgan really ditching government homeownership programs?

Earlier this week, on a conference call with analysts following its second quarter earnings, JPMorgan Chase CEO Jamie Dimon said his bank was pulling back, and may ditch completely, FHA lending, a key government program meant to promote homeownership. The reason: all those government fines that JPMorgan and other banks have had to fork over recently.

“We collected $600 million on [FHA] insurance. They disputed $200 million. The government called that fraud. We reimbursed $600 million to get out of the lawsuit,” said Dimon in response to a question from an analyst. “So the real question to me is, should we be in the FHA business at all?”

Bankers have been saying for a while that increased regulation will cause them to cut back on lending and other services. Banks have already started to step away from the business of offering cheap money transfers for immigrants and others. Regulators have forced banks to put in place more controls to make sure those services are not being used by terrorists or drug traffickers to launder money.

“Dimon was expressing a widely held frustration about the crackdown,” says Burt Ely, a bank consultant. “If the government is going to get tough on the banks, some are going to say forget it.”

The FHA program offers government insurance to lenders for mortgage loans with as little as a 3.5% down payment from borrowers, and it opens the mortgage market up to consumers with lower than average credit scores. Since the financial crisis, the program has been key in getting money to first-time homeowners. In recent years, about a third of all mortgages taken out for home purchases have been backed by the FHA program.

“I think [Dimon] is sick and tired of writing the government checks,” says Paul Miller, the analyst who asked the question that spurred the comment about the FHA.

Consumer advocates say if the nation’s largest banks were to pull out of the FHA program, many Americans would suffer. “What you would see is a severe reduction of blue collar people and minorities able to get loans,” says John Taylor, who is the head of the National Community Reinvestment Coalition.

On Wednesday, at a lunch in Washington of current and former bank regulators, Tony West, the U.S. Associate Attorney General, who has overseen the recent multi-billion settlements with banks, was asked whether he thinks the fines will limit the credit that banks offer consumers. He said the government was looking into the issue.

But here’s the thing: While FHA lending is down overall, JPMorgan loans in the first quarter accounted for a larger percentage of the direct loans made through the government program compared to the same time period last year. And the bank plays an even bigger role in the secondary market for FHA loans, buying up and funding mortgages that others make.

In the secondary market, JPMorgan’s activity is down 64% in the first half of this year. But so were all the big banks, according to Inside Mortgage Finance. For example, Wells Fargo funded 59% fewer FHA loans in the first half of the year. Overall, the FHA lending market is down. And the amount of FHA loans that JPMorgan is funding is down more than its rivals.

But JPMorgan’s home loan business in general was down to a larger degree compared to its rivals. So the drop in FHA lending could simply be a part of that trend. And Dimon could just be using FHA and his frustration with the government as an excuse.

JPMorgan loans that have some sort of government guarantee—including loans sold to Fannie Mae or Freddie Mac—were down 73% for the first half of this year compared to the same period last year. That’s a bigger drop than the shift in the bank’s FHA business by itself.

Of course, JPMorgan could be looking to stop doing mortgage business with the government completely. But that would be tough. Right now, the government—through FHA, Fannie, and Freddie—is involved in about 80% of all mortgage lending. “You can’t be a serious mortgage market player and not be involved in government programs,” says Guy Cecala, who runs Inside Mortgage Finance. “And it’s hard to be a large national bank without a larger mortgage business.”

What’s more, banks have to meet Fair Lending and Community Reinvestment Act requirements. If Dimon does chose to go it alone, he will still have to make many of the same loans, but hold them on the bank’s balance sheet without a government backing, at least until the mortgage market opens up again. That could end up increasing the bank’s risk, something Dimon is saying he is trying to avoid.

“I think Jamie just got a little hot under the collar,” says NCRC’s Taylor. “I don’t think he really thought through what his statement means.”

Jamie Dimon: Companies should feel free to bail on the U.S.

JPMorgan Chase CEO Jamie Dimon says he’s okay with companies using a hot tax dodge that could cost the U.S. tens of billions of dollars over the decade.

Dimon’s public thumbs up for inversions—the growing practice where American companies buy smaller foreign companies to relocate overseas and avoid paying U.S. taxes—came in response to a question from Fortune on a media conference call after JPMorgan JPM released its second quarter results. He said the real problem was the tax code, not CEOs trying to shirk their responsibilities.

“You want the choice to be able to go to Wal-Mart to get the lowest prices,” Dimon said on a conference call with reporters on Tuesday morning. “Companies should be able to make that choice as well.”

Dimon did not elaborate on the difference between choosing where to buy your underwear and where a corporations calls home. In a recent cover story for Fortune, Allan Sloan argued that U.S. companies are “positively unpatriotic” when they move their corporate headquarters overseas to pay lower taxes because of the benefits they receive by being (except for tax purposes) American companies. What’s more, Sloan argued undermining the U.S. tax base will be bad for all shareholders in the long run.

Dimon seemed to brush aside those concerns. He said it was inappropriate for anyone to moralize against deals in which U.S. companies seek lower tax rates through mergers. No large U.S. bank has proposed an inversion deal. Since the financial crisis, there has been a debate about the size of the subsidizes that large banks like JPMorgan receive from U.S. taxpayers.

At least for now, inversions are good for Dimon and his shareholders. The firm has been an advisor on 19 inversion deals that have been announced since last year. The bank is advising drug maker AbbVie ABBV on its $53 billion bid for Dublin-based Shire SHPG, which was announced on Monday.

“I love America. I’m just as patriotic as anyone,” said Dimon. “But we have a flawed corporate tax code that is driving U.S. companies overseas.”